The biggest hurdle for those of us seeking a loan is a poor credit history. A negative track record in repaying loans might not be enough to completely rule out approval, but it certainly does not help. So, the availability of auto loans with no credit checks can only be welcomed with open arms.
Just like any other loan application, the influence of a bad credit score is at the very least enough to push the overall cost up, with higher interest rates charged to compensate for the perceived degree of risk. But with that element of an application simply ignored, the promise of fast loan approval exists - though the higher interest rate still applies.
The thing to remember about auto loans is that the terms are better than unsecured personal loans. After all, the purchase itself (the car) is available as collateral, and whether the financing is supplied by a traditional lender or an online lender, there are advantages to be enjoyed.
Why No Credit Checks are Good
Though it might not seem to be the case, everyone benefits from an auto loan with no credit check. From the point of view of the borrower, the stress created by a bad credit history is avoided, and approval is given on the basis of income and affordability only.
From the point of view of the lender, they get to charge a higher rate of interest than normal. This is obviously good news for them, with higher profits should the borrower stay true to the repayment schedule. And with fast loan approval offered, the number of applicants is likely to be high.
This is not to ignore the risks involved in an auto loan under these terms. The lender could be taking on a hopeless case, while the borrower is set to spend more on interest than they should.
Types of Loans
There is no secret to the fact that there are two main types of loans; secured and unsecured. Nor is it a secret that secured loans are easier to get approval on. When looking to buy a car, the secured option is an auto loan with no credit check required, because the collateral used is the compensation from which the lender can regain their money.
But that is not to say that a fast loan approval is certain. There is always the need to prove that repayments can be afforded, but qualifying as a viable loan applicant is notable progress. And while approval may seem more likely, the use of security also means that a lower rate of interest will be charged too.
The unsecured loan, on the other hand, is never guaranteed to be approved. Even when an auto loan provides a car as security, the car itself depreciates in value very quickly. Also, the interest rate to be charged is inevitably going to be higher.
Where to Find the Best Loan
Another fact that is no secret is the fact that the best loan deals are to be found on the Internet. Even if an auto loan with no credit check is not available from every lender, the selection is extensive online. And, through the use of comparison websites, the very best terms can be quickly and easily identified.
Of course, it is always worthwhile visiting a traditional lender to find out what is on offer, but it hard to ignore the likely fast loan approval that all online lenders offer as standard. In fact, approval can often be secured in just a few hours. With lower interest rates, the whole auto loan deal seems excellent, but it is important to check out who the lender is with the BBB website too.